French Incomes Are Below America's Poorest States... And The Protesters Know It

Authored by Ryan McMaken via The Mises Institute,

With the rise of the Yellow Vest Movement in France - which began last October and continues today - French activists and writers have begun to re-evaluate the state of French income and poverty. Since the movement began, articles with titles such as " Revealed: The shocking scale of poverty in France in 2018 " or " Soul-searching in France as poverty leaves one million children hungry " have become more overtly political given the context of the protests.

Typically, the government's response to accusations of widespread poverty - which, as in America, are not necessarily accurate accusations - has been to spend more money on social programs.

But here's the thing: France is already spending more than the rest of Europe when it comes to welfare programs. According to the OECD, when it comes to "public social spending" as a percentage of GDP, France tops the list at over 31 percent.



But poverty isn't the only place where French pundits and protestors may see themselves as "falling behind." When it comes to the median household, France isn't competing well with its neighbors, either.


Moreover, the median French citizen appears to live on very little if compared to most Americans. if we compare France to individual US states — using the method explained here — we find that France's disposable income may rank below every US state except Louisiana.

Basically, I'm just using the OECD's disposable income numbers, and then applied the US-wide income number to each states based on how far above or below the national median income level each state is. It's a pretty crude measure, but the results are believable. It's not exactly pushing the bounds of plausibility to suggest that infrastructure quality, incomes, and the general quality of life in high-income states like Minnesota, Utah, Colorado, and Washington are very high indeed — just as the income data suggests:

When faced with income numbers like these, of course, skeptics may object that "income isn't everything!" and that "generous welfare programs make life longer and better." Well, if that's the case, then France seems especially inefficient at turning its social spending into health and welfare.


High Social Spending Can Be an Indicators of a Stagnant Economy



In other words, social spending doesn't solve any of these problems, but it does become more prevalent where economies are less productive.

Moreover, if we measure social spending as a proportion of GDP, it's going to naturally follow — all else being equal — that less productive economies have higher rates of social spending. After all, in an economy where social spending is growing, it would still be going down proportionally if the economy were growing at a faster rate.

This, however, is not what we see in France. Instead, social-spending rates are high, and when the government is pressured to "do something" about poverty, the state merely responds by promoting more social spending.


The French economy — which is notorious for its inflexibility and lack of competition in agriculture and other select industries — increasingly looks like one of the least free in Europe.  It simply isn't delivering the sort of economic growth that is necessary to keep social spending under control at a manageable level of spending. As the ongoing protests by the Yellow Vests suggests, many French residents are well aware of this.